Rent Shifting and Rent Sharing: A Re-examination of the Strategic Industrial Policy Problem
Abstract
This paper reexamines the market structure problem in the strategic trade policy literature. It is shown that rent sharing between the home union and the home firms raises total home industry rents regardless of whether the international duopoly is Cournot or Bertrand. Furthermore, home welfare also rises with cooperation if the international industry consists of more than two firms, if the industry is faced with entry, and if there is domestic consumption. This paper shows that rent sharing can be a robust strategic industrial policy and can be interpreted as a solution to the market structure dilemma.Download Info
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Bibliographic Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 28 (1995)
Issue (Month): 2 (May)
Pages: 450-62
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Stephan F. Hamilton & Till Requate, 2001.
"Vertical Structure and Strategic Environmental Trade Policy,"
CESifo Working Paper Series
594, CESifo Group Munich.
- Hamilton, Stephen F. & Requate, Till, 2004. "Vertical structure and strategic environmental trade policy," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 260-269, March.
- Volokh, Alexander, 2010. "Privatization, free riding, and industry-expanding lobbying," International Review of Law and Economics, Elsevier, vol. 30(1), pages 62-70, March.
- Stiegert, Kyle W. & Wang, Shinn-Shyr, 2003. "Imperfect Competition And Strategic Trade Theory: What Have We Learned," Working Papers 14589, International Agricultural Trade Research Consortium.
- Subhayu Bandyopadhyay & Sudeshna Bandyopadhyay, 2001. "Efficient bargaining, welfare and strategic export policy," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 10(2), pages 133-149.
- Reimer, Jeffrey J. & Stiegert, Kyle W., 2006. "Evidence on Imperfect Competition and Strategic Trade Theory," Staff Paper Series 498, University of Wisconsin, Agricultural and Applied Economics.
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